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Until it cascades like Lehman and AIG with USA citizens holding the bag. In two days we are 33,333 days since the crash of 1929.
by swader999 6y ago
Until it cascades like Lehman and AIG with USA citizens holding the bag. In two days we are 33,333 days since the crash of 1929.
- danhak 6y agoThis is nothing like the size of the bubble (US housing market) that precipitated those crashes.
- swader999 6y agoIt is actually. The housing market had real collateral even if it was overly appraised.
- danhak 6y agoNo, it's not. Not even close. The current market cap of GME is $25 billion. Meanwhile, the size of the subprime mortgage market in 2008 was in the neighborhood of $50 trillion.
- swader999 6y agoShorting losses can be infinite. Then add in the derivatives at play. Who backs these trades? Who backs them? What gets triggered when any of these default on their contracts?
- carlmr 6y agoThe bubble may become more visible if a chain reaction is started.
- josephorjoe 6y agoIf that is possible here, there needs to be more regulation on hedge funds so they do not operate in a "heads I win, tails the US govt. bails me out" scenario.
- h_anna_h 6y agoThe solution is simple, do not bail them out.
- throwaway838nq 6y agoThat's the most hilarious part of it. It's a given that someone is going bankrupt big time and someone is going to want to be made whole. They will threaten the stock market until the USG bails them out.
- peterwoerner 6y agohttps://twitter.com/PigeonsK/status/1354824493982773249 https://twitter.com/PigeonsK/status/1354824493982773249 Argument for cascading.
- heartbreak 6y agoThe assumptions in that 4chan screenshot are putting in a lot of work.
- swader999 6y agoWho backs each party isn't that hard to verify. The only assumption is the copy cat trading of Melvin's strategy which seems fairly safe to make.
- heartbreak 6y agoWell, one assumption is that the exposure is actually a meaningful number to an investment bank.
- adamcstephens 6y agoCascading already happened last March and the Fed bailed out the market. That backstopping has clearly helped buoy the market to new highs, while the real economy is contracting. Something like this could trigger a cascade, but that cascade would rest solely on the people who built this bubble.